FAO Chief Economist at 2022 ECOSOC Financing for Development Forum: General Debate

 
2022 ECOSOC Financing for Development Forum

 Statement by FAO to the General Debate, delivered by 

FAO Chief Economist, Máximo Torero

Your Excellencies, Distinguished Guests, Ladies and Gentlemen:

I am delighted to be here on behalf of the Food and Agriculture Organization of the United Nations. 

My name is Maximo Torero – I am the Chief Economist of FAO.

Food systems transformation is one of the most powerful tools to achieve the Agenda 2030. Agriculture accounts for one-third of global gross-domestic product. The food and agricultural sector provides livelihoods for 40 percent of today’s global population. A high-performing and inclusive agrifood system is a solution to tackle world hunger; accelerate recovery from the COVID-19 pandemic; and create resilient jobs and reverse the devastating climate change and loss of natural resources.

Nevertheless, today’s food system is not inclusive and sustainable. It is estimated that agrifood systems generate USD 12 trillion in hidden social, economic and environmental costs each year. For this, it is essential that start to understand the true cost of food.

Transforming food systems will require significant financial investment. It’s estimated that between USD 300 and 400 billion of additional investment per year is needed. Most small-scale producers and Micro, Small, and Medium Enterprises, women and youth, particularly in the Global South do not have access to rural finance. Eighty percent of finance demand for smallholder farmers is unmet. And only 1.7 percent of the global climate finance goes to smallholder farmers, when we know that, in the agricultural sector, significant emissions – methane emissions – are being produced.

In addition, transforming agrifood systems would require a fundamental change in the way agriculture is financed. According to the joint report by FAO, UNDP and UNEP on ‘’Repurposing agricultural support to transform food systems,’’ agricultural subsidies to producers currently accounts for almost USD 540 billion a year. As they are currently structured, agricultural subsidies are distortive. They promote production practices that do not support access to healthy diets, and they have significant effects on heath as a result of this, but also on our nature.

Therefore, transforming food systems requires combining additional financial investments in agrifood systems with the reorientation of government expenditures for agriculture and food systems towards a common objective and towards public goods and services, which will increase sustainability, efficiency, and equity, and which will provide access to healthy diets for all.

Furthermore, green, inclusive finance has a fundamental role to play in providing a diverse range of financial instruments to support small-scale actors living in situations of vulnerability. 

Ladies and gentlemen, the pandemic shock has significantly increased poverty and inequality globally. There is a high risk that these numbers will increase going forward as the war in Ukraine and soaring food prices inflict further damage on the livelihoods of many. To address this challenging context, FAO is ready work together with all the stakeholders to implement the steps required to finance the agrifood systems transformation. 

Thank you, and I wish you the best success in the Forum today. Thank you for the opportunity of talking to you.